Alabama 2025 Regular Session

Alabama Senate Bill SB71 Compare Versions

Only one version of the bill is available at this time.

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1	1	SB71INTRODUCED
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3	3	SB71
4	4	IUPVWZZ-1
5	5	By Senators Jones, Allen, Givhan, Bell, Kitchens, Elliott,
6	6	Price, Butler, Sessions, Williams, Barfoot, Stewart, Roberts,
7	7	Hatcher, Kelley, Stutts, Smitherman, Beasley
8	8	RFD: Finance and Taxation Education
9	9	First Read: 04-Feb-25
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16	16	7 IUPVWZZ-1 01/31/2025 JF (L)lg 2025-446
17	17	Page 1
18	18	First Read: 04-Feb-25
19	19	SYNOPSIS:
20	20	Under current law, certain compensation for
21	21	active service members of the United States Armed
22	22	Forces is not subject to state income tax.
23	23	This bill would expand this exemption to include
24	24	certain compensation of civilian employees of the U.S.
25	25	Department of Defense and Armed Forces.
26	26	A BILL
27	27	TO BE ENTITLED
28	28	AN ACT
29	29	Relating to income tax; to amend Section 40-18-3, Code
30	30	of Alabama 1975, as last amended by Act 2024-170 of the 2024
31	31	Regular Session, to exempt certain compensation of civilian
32	32	employees of the U.S. Department of Defense and Armed Forces
33	33	from state income tax.
34	34	BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
35	35	Section 1. Section 40-18-3, Code of Alabama 1975, as
36	36	last amended by Act 2024-170 of the 2024 Regular Session, is
37	37	amended to read as follows:
38	38	"§40-18-3
39	39	(a) The salaries, fees, commissions, or other income of
40	40	officers or agents of the United States or its agencies and
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68	68	28 SB71 INTRODUCED
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70	70	officers or agents of the United States or its agencies and
71	71	instrumentalities or its contractees, received from the United
72	72	States or from its agencies and instrumentalities, shall be
73	73	subject to income taxes levied by the State of Alabama as
74	74	other income is taxed, but without discrimination, and only to
75	75	the same extent and in the same manner as other income is
76	76	taxed, insofar as the State of Alabama may be constitutionally
77	77	or legally authorized to tax such income ; provided, that .
78	78	(b) Notwithstanding subsection (a), money paid by the
79	79	United States to a personan individual as compensation as a
80	80	civilian employee of the U.S. Department of Defense or Armed
81	81	Forces, or for active service as a member of the Armed
82	82	Forcesarmed forces of the United States, including members of
83	83	the National Guard and Reserve components, shall not be
84	84	subject to income taxes levied by the State of Alabama, for
85	85	compensation earned while the individual is:
86	86	(1) Inin a combat zone designated by executive order of
87	87	the President of the United States ,;
88	88	(2)Deployeddeployed to locations outside the United
89	89	States,; or
90	90	(3)Activatedactivated by the Governor of the State of
91	91	Alabama or the President of the United States to support state
92	92	or federal response to emergencies within or outside of the
93	93	United States shall not be subject to income taxes levied by
94	94	the State of Alabama ."
95	95	Section 2. The provisions of this act apply to tax
96	96	years beginning on or after January 1, 2026.
97	97	Section 3. This act shall become effective on January
98	98	1, 2026.
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